Zoning Code Amendment No. 2016-015 – Amendment to Section 30-7 of the Zoning and Development Code by Renumbering the Existing Section 30-7 to 30-7(A) and Adding a New Section 30-7(B) Entitled “Residential Indoor Cultivation” to Regulate Indoor Cultivation of Marijuana in the City of Fontana.

RECOMMENDATION:

That the City Council:

1. Determine that this Ordinance is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines and direct staff to file a Notice of Exemption because it has no potential for resulting in physical change in the environment, directly or indirectly. Under Title 14 of the California Code of Regulations, Section 15061(b)(3), this Ordinance is nonetheless exempt from the requirements of CEQA in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

2. Waive further reading and introduce Ordinance No. ____ amending Section 30-7 of the Zoning and Development Code by renumbering the existing Section 30-7 to 30-7(A) and adding a new Section 30-7(B) entitled “Residential Indoor Marijuana Cultivation” to regulate indoor cultivation of marijuana in the City of Fontana and adopt a Resolution establishing fees for Residential Indoor Marijuana Cultivation Permit and fees for Annual Renewal Permit and that the reading of the title constitutes the first reading thereof.

3. Adopt Resolution No. 2017-___ a Resolution of the City Council of the City of Fontana, California establishing fees for Residential Indoor Marijuana Cultivation Permit and fee for annual renewal of the permit.

COUNCIL GOALS:

* To create a team by working together to provide stability and consistent policy direction.* To create a team by communicating Goals and Objectives to all sectors of the community.* To improve public safety by combating gang and drug activity.

DISCUSSION:

The City of Fontana City Council adopted Ordinance No. 1747, banning and regulating all marijuana uses in the City of Fontana (“City”) to the extent allowed under California law at its meeting on September 13, 2016. That ordinance took effect in October 2016, and includes a provision requiring a Residential Indoor Marijuana Cultivation (“RIMC”) permit for any individual who desires to grow up to six (6) marijuana plants in their private residence, as allowed under the Adult Use of Marijuana Act (“AUMA”), which became California law on November 9, 2016.

In light of the new legislation, the City is proposing regulations surrounding the issuance of RIMC permits. Attached to this report is a proposed Ordinance (Attachment 1) entitled “Residential Indoor Marijuana Cultivation”, which would amend Section 30-7 of the Zoning and Development Code to provide procedures for City issued RIMC permits. Also attached to this report, is a proposed Resolution (Attachment 2) for City Council’s consideration, which establishes a permit application fee for the issuance of the subject RIMC permit and the fee for the renewal of the permit.

BACKGROUND:

On Election Day, Californians approved Proposition 64, also known as AUMA, which legalized recreational use of marijuana for adults over 21 years of age, beginning on November 9, 2016. As of that date, AUMA immediately legalized possession, transport, purchase, use, and transfer of recreational marijuana for individuals 21 years of age or older. Under AUMA, adults can possess up to 28.5 grams of marijuana, up to 8 grams of marijuana in the form of concentrated cannabis, which may be present in marijuana products such as edibles, and up to six (6) living marijuana plants, and any marijuana produced by those plants. It also legalized the cultivation of marijuana, marijuana delivery services, and recreational marijuana retail services.

However, AUMA allows for local control of marijuana uses. It allows local governments to:

Ban outdoor cultivation of marijuana, unless the California Attorney General determines marijuana is no longer illegal under federal law (If marijuana is federally legalized, outdoor cultivation could be regulated, but not prohibited).

Reasonably regulate indoor cultivation in private residences, but not ban it outright. AUMA would allow individuals to grow up to six (6) marijuana plants in their home, and to possess all of the marijuana those plants provide.

As noted above, the City Council adopted Ordinance No. 1747 in October 2016, which regulates personal, medical, and commercial use of marijuana so that the Fontana Zoning and Development Code properly regulated these issues prior to the passage of AUMA.

ANALYSIS:

A.Zoning Code Amendment to Codify RIMC Permit Process.

As noted above, the Fontana Municipal Code currently bans medical marijuana dispensaries, delivery services, and outdoor cultivation. These regulations are permissible because AUMA authorizes cities to “reasonably regulate” indoor cultivation of marijuana in private residences, ban outdoor cultivation of marijuana entirely unless it is federally legalized, and prohibit any marijuana-related business entirely.

The second phase in the City’s effort to “reasonably regulate” indoor marijuana cultivation is to codify procedures in the Zoning and Development Code for RIMC permits. The RIMC permit will require that any persons cultivating marijuana within residences be subject to certain regulatory standards, including a limitation to no more than six (6) marijuana plants. For example, permit applications will not be approved unless the applicant is 21 or older, has no history of drug-related felonies, has no pending or past code enforcement actions in the City, and has paid all City taxes, fees, and other charges. The residence where the cultivation occurs must be the applicant’s primary dwelling (i.e., “grow houses” are prohibited) and must not be substandard under existing code regulations; the cultivation area must be indoors and secured, must not be accessible to minors, must not be visible or detectible from the outside. Commercial transactions related to marijuana may not occur at the residence. Finally, violations of any permit requirements are grounds for permit revocation and enforcement actions.

Based on the foregoing, staff recommends that the City Council adopt an ordinance amending the Zoning and Development Code to codify RIMC permit procedures.

The City’s Municipal Code contains provisions for amending the Municipal/Zoning Code in Section 30-40. This section requires any changes to the Zoning and Development Code be reviewed by the Planning Commission at a public hearing and that the Planning Commission forward a recommendation to the City Council approving or disapproving the proposed amendment. The Planning Commission held a public hearing on the draft Ordinance on December 6, 2016 and voted unanimously to forward the recommendation of approval to the City Council. Planning Commission Resolution No. 2016-010 is included herein as Attachment 3. The Minutes of the Planning Commission Meeting of December 6, 2016 is attached in Attachment 4.

B. Establishment of RIMC Permit Fees.

In addition to amending the Zoning and Development Code to codify the RIMC permitting procedures, Staff is also recommending the City establish a related permitting fee to process the RIMC permits. The City has the authority to impose fees, charges and rates under the police power granted by Article XI, Section 7 of the California Constitution. In order for the City to legally impose a fee, the amount must not exceed the estimated reasonable costs of providing the service for which the fee is charged. In addition to this requirement, the City must follow specific procedures outlined in the California Government Code.

City staff has reviewed the staff time needed for processing RIMC permits. Based on its review, City staff has estimated that 5.6 hours of staff time are required for processing a permit application. The specific actions required for processing a permit application include the initial application intake, review, permit issuance (3.5 hours), fingerprinting and/or photography and background check (1.1 hours), site visit (1 hour) by position. These time periods are reasonable estimates for providing these services.

City staff also estimates that the average hourly cost for staff to provide these services is $83 per hour. For 5.6 hours of staff time per application, the total estimated cost for processing an application is $411.12.

In addition, City staff also reviewed staff time required for processing the renewal of the RIMC permits. Based on that review, City staff estimated 3.6 hours of staff time are required for processing the renewal of the RIMC permits. The average hourly rate for processing the renewal permits is $70.28. For the 3.6 hours of staff time per application, the total estimated cost for processing a renewal permit is $253.00.

The fee amounts, as required by law, represents the reasonable relationship between the fees to be collected and the cost incurred by the City for processing the permit applications. The data compiled by City staff to calculate the estimated hours and costs for processing applications and renewal of permits, respectively are attached as Exhibits “A” and “B” to the Resolution and copies have been made available for public review, as required by law.

In order to establish the calculated free, the City Attorney’s office has prepared a Resolution. The proposed Resolution sets the amount of the fee to be charged for processing RIMC permit applications and for processing the annual renewal permits.

FISCAL IMPACT:

Recovery of the actual costs incurred by the City to process the permit applications described in this report would be a beneficial impact to the City.

MOTION:

Based on the information in this staff report, staff recommends that the City Council approve staff's recommendations.